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City Structure, Job Search and Labour Discrimination. Theory and Policy Implications

  • Selod, Harris
  • Zenou, Yves

We consider a search-matching model in which black workers are discriminated against and the job arrival rates of all workers depend on social networks as well as distance to jobs. Location choices are mainly driven by the racial preferences of households. There are two possible urban equilibrium and, we show that, under some reasonable condition, all workers are better off in the equilibrium where blacks are close to jobs. We then consider two policies: affirmative action and employment subsidies to the firms that hire black workers. We show that, in cities where black workers reside far away from jobs, the optimal policy is to impose higher quotas or employment subsidies than in cities where they live close to jobs.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5009.

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Date of creation: Apr 2005
Date of revision:
Handle: RePEc:cpr:ceprdp:5009
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  1. Yinger, John, 1976. "Racial prejudice and racial residential segregation in an urban model," Journal of Urban Economics, Elsevier, vol. 3(4), pages 383-396, October.
  2. Calvó-Armengol, Antoni & Zenou, Yves, 2001. "Job Matching, Social Network and Word-of-Mouth Communication," Seminar Papers 695, Stockholm University, Institute for International Economic Studies.
  3. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-52, June.
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  7. Battu, Harminder & Mwale, McDonald & Zenou, Yves, 2003. "Do Oppositional Identities Reduce Employment for Ethnic Minorities?," Working Paper Series 603, Research Institute of Industrial Economics.
  8. Ihlanfeldt, Keith R. & Scafidi, Benjamin, 2002. "Black Self-Segregation as a Cause of Housing Segregation: Evidence from the Multi-City Study of Urban Inequality," Journal of Urban Economics, Elsevier, vol. 51(2), pages 366-390, March.
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  10. Ihlanfeldt, Keith R., 1997. "Information on the Spatial Distribution of Job Opportunities within Metropolitan Areas," Journal of Urban Economics, Elsevier, vol. 41(2), pages 218-242, March.
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  12. Wasmer, Etienne & Zenou, Yves, 2005. "Equilibrium Search Unemployment with Explicit Spatial Frictions," IZA Discussion Papers 1465, Institute for the Study of Labor (IZA).
  13. Gobillon, Laurent & Selod, Harris & Zenou, Yves, 2003. "Spatial Mismatch: From the Hypothesis to the Theories," CEPR Discussion Papers 3740, C.E.P.R. Discussion Papers.
  14. Fujita,Masahisa, 1989. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521346627.
  15. Holzer, Harry J. & Reaser, Jess, 2000. "Black Applicants, Black Employees, and Urban Labor Market Policy," Journal of Urban Economics, Elsevier, vol. 48(3), pages 365-387, November.
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  19. H. J. Holzer, . "Why do small establishments hire fewer blacks than large ones," Institute for Research on Poverty Discussion Papers 1119-97, University of Wisconsin Institute for Research on Poverty.
  20. Barbara Petrongolo & Christopher A. Pissarides, 2000. "Looking Into the Black Box: A Survey of the Matching Function," CEP Discussion Papers dp0470, Centre for Economic Performance, LSE.
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  25. Rogers, Cynthia L., 1997. "Job Search and Unemployment Duration: Implications for the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 42(1), pages 109-132, July.
  26. Wasmer, Etienne & Zenou, Yves, 2002. "Does City Structure Affect Job Search and Welfare?," Journal of Urban Economics, Elsevier, vol. 51(3), pages 515-541, May.
  27. Harry J. Holzer, 1998. "Why Do Small Establishments Hire Fewer Blacks Than Large Ones?," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 896-914.
  28. Jackson, Matthew O. & Calvo, Antoni, 2002. "Social Networks in Determing Employment and Wages: Patterns, Dynamics, and Inequality," Working Papers 1149, California Institute of Technology, Division of the Humanities and Social Sciences.
  29. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
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  35. Leonard, Jonathan S, 1990. "The Impact of Affirmative Action Regulation and Equal Employment Law on Black Employment," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 47-63, Fall.
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  38. Kanemoto, Yoshitsugu, 1980. "Theories of urban externalities," MPRA Paper 24614, University Library of Munich, Germany.
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